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The Builder Who Owes You — Subcontractor Payment Rights in Australia

By Dan Reeve 5 min read

By Dan Reeve — Working handyman and founder of SMASH Invoices. Built SMASH after losing $1,200 in uninvoiced jobs in a single year. He still takes on handyman work and uses SMASH on every job. About Dan →

Subcontractors in Australia have statutory rights under the Security of Payment Act (SOPA) to receive payment within set timeframes, typically 15 business days from invoice for subcontractors. When a head contractor delays payment because "we haven't been paid by the client yet," this is not a valid reason to withhold your money under SOPA. Most subcontractors don't know these rights exist. Here's what you can do when the builder owes you.

The reality of being subcontracted

You did the electrical work on the fit-out. Three days. $2,400 in labour plus materials. Clean, on-spec, on-time. Done.

The builder said they'd pay at the end of the month. Then: "We're still waiting on the client to pay the progress claim." Then nothing for six weeks.

You've been paid for nothing. You paid for the materials out of your own pocket two months ago.

This is the most common story in the trades. You did the work. The builder is in the middle. And somehow the fact that they haven't been paid becomes your problem.

"Two months for $2,200. Builder kept saying the developer was holding payment. Not my problem, I invoiced the builder, not the developer. Finally sent a formal SOPA payment claim and got paid within two weeks." — Jim P., Electrician, Perth WA [PLACEHOLDER]

What the Security of Payment Act actually says

The Security of Payment Act (SOPA) applies in every Australian state, though the specific legislation varies:

  • NSW: Building and Construction Industry Security of Payment Act 1999
  • VIC: Building and Construction Industry Security of Payment Act 2002
  • QLD: Building Industry Fairness (Security of Payment) Act 2017
  • WA: Construction Contracts Act 2004
  • SA: Building and Construction Industry Security of Payment Act 2009

Key rights under SOPA:

  1. You can issue a formal "payment claim" — a SOPA payment claim is a specific document that triggers the process. It must be marked "This is a payment claim made under the [relevant Act]."

  2. The builder must respond within set timeframes. If they disagree with your claim, they must issue a "payment schedule" within 15 business days explaining how much they will pay and why. If they don't respond at all, the full claimed amount becomes due.

  3. You can go to adjudication — a fast-track dispute resolution process. Decisions are typically made within 10 business days of the adjudicator being appointed. Cost is typically $100–$500.

  4. "I haven't been paid yet" is not a valid defence. Under SOPA, the head contractor's payment chain doesn't affect your rights as a subcontractor. Your contract is with the builder. Their client's payment status is irrelevant.

When SOPA applies

SOPA applies to construction contracts in Australia, broadly defined to include building, engineering, installation, fit-out, maintenance, and cleaning work related to construction.

Most trade subcontracting falls within its scope. Check your state's specific legislation for exclusions.

How to send a SOPA payment claim

  1. Your regular invoice is the basis, make sure it's detailed and accurate
  2. Add the statement: "This is a payment claim made under the Building and Construction Industry Security of Payment Act [year] [state]"
  3. Deliver it formally, email with read receipt or registered post
  4. Start the clock, the builder now has 15 business days to pay or issue a payment schedule

Keep records of everything: the original contract or quote, your invoice, the payment claim, all communications.

Frequently asked questions

Does the Security of Payment Act apply to sole trader subcontractors in Australia? Yes. SOPA applies to construction contracts regardless of business size or structure. A sole trader subcontractor has the same statutory rights as a large construction company under SOPA.

How long does SOPA adjudication take? Typically 2–4 weeks from lodging the adjudication application to receiving a decision. Significantly faster than court proceedings for debt recovery. The decision is binding and enforceable as a court order.

What if the builder goes into administration while owing me money? This is the most difficult situation. As an unsecured creditor, subcontractors typically recover very little in a builder insolvency. Some states (particularly QLD under the Queensland Building Plan) have additional protections, check your state's specific provisions. Project bank accounts (PBAs), mandatory in QLD on government projects, are designed to protect subcontractors in insolvency.

Can I stop work if a builder hasn't paid me? Yes, in certain circumstances. Under SOPA, if you have a valid unpaid payment claim and the builder hasn't issued a payment schedule, you may have the right to suspend work after giving notice. Get legal advice before suspending, doing so incorrectly can constitute a breach of contract.

Is it worth using SOPA for small amounts? For amounts under $1,000, the effort of a formal SOPA claim may outweigh the benefit. For amounts over $1,000, a SOPA payment claim often produces payment quickly, many builders pay as soon as they receive one, rather than going to adjudication.

Invoice accurately. Know your rights. Get paid. Start Free →

Internal links: The property manager runaround · "I'll pay you next week"

About Dan Reeve
Working handyman and founder of SMASH Invoices. Dan has been a sole trader for over a decade and built SMASH after losing $1,200 in uninvoiced jobs in a single year.